1. Strategic Management Strategic Management: Concepts and Cases, 11/E Strategic Management: Concepts and Cases, 11/E by Fred David

2. Vision & Mission Strategy Formulation External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection Strategic formulation

3. Vision “What do we want to become?” Agreement on the basic vision for which the firm strives to achieve in the long run is critically important to the firm’s success. Examples of vision statements: The Vision of Pepsi To become the leading producer and marketer of food and beverage products in the world

5. What is our business?” Reveal what an organization wants to be and whom it wants to serve Essential for effectively establishing objectives and formulating strategies Mission Statements

6. Affects development of vision & mission Responsibilities to – –Consumers –Environmentalists –Minorities –Communities Social Policy & Mission Managerial philosophy shapes social policy --

7. Social Policy & Mission Social policy should be integrated in all strategic-management activities Mission should convey the social responsibility of the firm

8. Mission Elements Customers Markets Employees Public Image Self-Concept Philosophy Survival Growth Profit Products Services Technology

9. The essential components of a mission statement Components and Questions That a Mission Statement Should Answer 1.Customers: Who are the firm’s customers? 2.Products or services: What are the firm’s major products? 3.Markets: Geographically, where does the firm compete? 4.Technology: Is the firm technologically current? 5.Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness? 6.Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm? 7.Self-concept: What is the firm’s distinctive competence or major competitive advantage? 8.Concern for public image: Is the firm responsive to social, community, and environmental concerns? 9.Concern for employees: Are employees a valuable asset of the firm?

10. 2x average return on shareholder’s equity Positive relationship to company performance 30% higher return on certain financial measures Vision & Mission Research results are mixed, however, firms with formal mission statements generally see a:

11. PepsiCo Mission PepsiCo’s mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls, and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

12. Mission Statement Evaluation Matrix COMPONENTS OrganizationCustomers Products ServicesMarkets Concern for Survival, Growth, Profitabilit yTechnology Dell Proposed Dell

13. Mission Statement Evaluation Matrix COMPONENTS OrganizationPhilosophy Self- Concept Concern for Public Image Concern for Employees Dell Proposed dell

14. Questions Discuss how to develop a mission statement and why a mission systems are considered imperative in the strategic formulation process. Discuss what you would consider to be the 3 most important elements of an “ideal mission statement “ for an organisation of your choice.